LIFE INSURANCE MATHEMATICS 9

are very simple, and may be explained in a few words.

The calculations are based upon a mortality table. This table shows how a certain large number of persons, as 100,000 or 1,000,000, setting forth from a given age, is diminished year by year by death. They are based upon actual experience, and when used for life insurance computations, upon actual experience among insured lives.

Of course, no company does have just 100,000 men set forth, for instance, from age 21 at the same time, and continue under observation until all have died. Nor do all come under observation, even, at a given age at all, nor all remain under observation until they die. What the companies have is the record of the actual exposures at each attained age, out of the lives insured by them, while under observation. That is to say, they can tell how many persons have passed through a certain year of age while insured by them, and how many of these have died. By dividing the number of the latter for each age by the number of the former, they can ascertain what percentage of those who passed through that year of age have in fact died. This is called the death-rate at that age.

As much the larger number of "exposures" in a general insurance experience at any given age at which new lives are accepted for insur-